The first stage of the $150 million class action trial against the former directors and sellers of shares in collapsed carpetmaker Feltex is set to start in March next year.

However, there are still interim battles to be waged in the complex action which has now entered its fifth year.

Former Feltex shareholder Eric Houghton and 3000 other shareholders who bought shares in Feltex in a public offering in 2004 are claiming the prospectus was misleading and contained untrue statements.

The carpetmaker collapsed less than two years later, and shareholders lost their investments.

Stage one of a two-stage trial will take place in the High Court in Wellington on March 14 next year before Justice Robert Dobson and it has been allocated up to 10 weeks to be heard.

The lawyer for Houghton and the other plaintiffs, Austin Forbes, QC, said the first stage of the trial would hear Houghton's claim and common issues that affect him and the other shareholder plaintiffs.

Houghton and the other shareholders won a significant victory in November last year when the Court of Appeal dismissed five appeals by the former directors, sellers and promoters of Feltex which, if successful, could have derailed the representative action.

Now, however, defendant Credit Suisse, the seller of Feltex shares, has applied to the Supreme Court of Appeal for leave to appeal against that decision.

Credit Suisse is arguing that the plaintiffs should have filed individual claims showing their reliance on the prospectus and loss. If Credit Suisse is granted leave to appeal and if it succeeded, that would mean most of the 3000 shareholders would be too late to join the action.

"It certainly would have consequences but there are other ways we may be able to keep the people in the proceeding," Forbes said.

Houghton is opposing the application for leave to appeal, which is still to be decided by the court.

Forbes said in the meantime he and the lawyer for the defendants were in the process of timetabling some of the outstanding issues that needed to take place before the trial began.

"Justice Dobson is firm, at this stage, that he doesn't want the preparation for the trial to be held up by the appeal to the Supreme Court.

"Once we have the judgment of the Supreme Court, if it impacts on the trial preparation, we'll consider that if and when it happens."

In a separate but related matter, a Court of Appeal decision in December ruled that the former directors of Feltex and failed finance company Bridgecorp could use the failed companies' insurance policies to pay the costs of their defence in damages cases.

In the Feltex case, the shareholders claimed the company's insurance policy could not be used to pay the directors' defence bills in the shareholders' $150m case against them.

However, the court ruled the directors could access those policies, which means that if shareholders ultimately succeed in their claims against the directors, the pool of funds available to them for compensation will be less because some will have been spent on the directors' legal bills. Houghton has applied for leave to appeal against that decision.

"That's a novel point that hasn't arisen in New Zealand before though so it's certainly possible that leave will be granted," Forbes said.